Sovereign fund seeks HK investment as focus shifts to emerging markets
China's US$300 billion sovereign wealth fund is increasingly interested in seeking opportunities in Hong Kong as it shifts its focus this year to investing in emerging markets, according to an executive.
Wang Jianxi, the vice-president of China Investment Corp (CIC), said the company's investment strategy does not target a specific region or country. But with the portfolios divided between emerging and developed markets, Hong Kong is one place the company has been seeking investment opportunities.
'We have been investing in Hong Kong and will continue to seek opportunity in line with our strategy,' Wang told the South China Morning Post at the sidelines of the National People's Congress.
Hong Kong is considered a developed market by some economists and an emerging market by others.
CIC chairman Lou Jiwei, speaking at the Asian Financial Forum in Hong Kong in January, said the sovereign fund, established in late 2007, wanted to do more deals than in the United States, where it lost bets on Wall Street firms such as Morgan Stanley and Blackstone Group.
While he declined to specify which firms or what kinds of business the fund is seeking in the city, Wang said the fund had invested in four large initial public offerings in Hong Kong in the past year.
CIC, which performed well through the financial crisis mostly by keeping its holdings in cash, has made a number of investments into share offerings in Hong Kong.
Securing a pre-initial public offering investment, called a 'cornerstone investment', from CIC is quickly becoming a key goal for investment bankers.
Listing sponsors hope that an investment from CIC will indicate the company's strategic value for potential investors and provide a source of future capital for the company.
Wang indicated that the company will be more interested in seeking opportunities in the city as the company will stick to the asset allocation-oriented investment strategy this year.
Yang Chao, chairman of China Life Insurance, the mainland's biggest life insurer, said the company will focus on seeking investment in Hong Kong.
'We are particularly interested in Hong Kong and focus on seeking opportunity there,' Yang said.
The company is seeking to expand its presence in the city, either through buying into local insurance or banking businesses.
